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Question
The difference between a tax and a subsidy is that when the government places a tax on a good, it ________ the equilibrium price and ________ the equilibrium quantity, whereas when the government places a subsidy on a good, it ________ the equilibrium price and ________ the equilibrium quantity.
a. increases; decreases; decreases; increases
b. increases; increases; decreases; decreases
c. decreases; decreases; increases; increases
d. decreases; increases; increases; decreases
e. increases; does not change; does not change; increases
Answer
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Related questions
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The economic entity most likely to engage in price gouging is
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Q:
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Q:
Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?
a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
Q:
A tax on milk would likely cause a decrease in the price ofa. ice cream. b. cheese. c. soymilk.d. nondairy creamer.e. breakfast cereal.
Q:
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Q:
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